US VGO premiums to WTI crude fall as demand weakens

Low-sulphur (0.5% maximum) VGO premiums to West Texas Intermediate (WTI) crude futures trading on the NYMEX were assessed at $17.50/gal, down from $20.00/gal on Tuesday.

High-sulphur (2% maximum) VGO was assessed at $16.25/gal over WTI, down from $17.50/gal.

In Europe, VGO premiums were also assessed lower on Thursday, partly as a result of a fall in sales to the key US export market.

The US premiums remain well below the $30/bbl mark hit earlier this year but have still had an impact on downstream markets, such as base oils, since VGO is used as a key feedstock indicator for the base oils market.